China’s e-commerce platforms brought in RMB 695.9 billion ($104 billion) in sales during this year’s 618 shopping festival, an increase of 20.3% over last year’s number, the slowest growth rate since 2020, according to data compiled from the Chinese market analytics firm Syntun.
Why it matters: China’s consumer confidence is at a new low as major cities emerge from harsh lockdowns implemented to prevent the spread of Covid-19, with some Chinese cities still facing the unpredictability of on-and-off partial lockdowns. Against this backdrop, the country’s e-commerce platforms used the shopping festival to help retailers recover some of their lost sales over the past few months.
Details: JD reported RMB 379.3 billion in sales, which is a yearly increase of 10.3%, but significantly lower than the yearly growth rate of 27.7% in 2021. However, the e-commerce major’s on-demand retail platform JD Daojia hit some critical milestones, recording a 77% growth in sales revenue and with the number of users growing four-fold. Overall, this year’s 618 deals are simpler and heftier than previous years, in the hopes of luring more customers during the nationwide economic downturn.
- JD’s on-demand retail platform JD Daojia and JD Shop Now saw significant growth. On June 18, the last day of the shopping event, total sales on the platforms grew by 77% from last year, bringing in RMB 600 million in single-day transaction volume. Sales of home appliances saw a ten-fold growth on the platforms, while sales of cosmetic goods and sports goods grew three-fold.
- The growth of JD’s on-demand services is due to its partnership with offline retailers. JD’s Shop Now service worked with more than 150,000 offline stores across China. Those platforms also accepted shopping coupons released by local governments in Changsha, Yantai, Yibin, Zhongshan, Taiyuan, and Zhengzhou. Such pairings helped people get better deals, and helped governments stimulate an economy hurt by the pandemic resurgence.
- ByteDance’s short video platform Douyin, a robust e-commerce platform, said in its 618 report that consumers in Shanghai showed the strongest buying power during the period, while people in Chongqing, Beijing, Chengdu, and Guangzhou trailed. Gen-Z has become the primary buying group, with their purchases increasing by 164% from last year.
- Chinese smartphone maker Xiaomi reported that it brought in RMB 18.7 billion in sales during the shopping festival. The brand was also the top-selling Android system smartphones across most major Chinese online retailers during 618.
Context: Launched in 2010, 618 is China’s second-most important shopping event after Alibaba’s Single’s Day shopping event on November 11. In the past decade, the event has evolved from a rival event created by JD to a key mid-year shopping promotion for all e-commerce majors.